Thermo Fisher Jumps on $13.6B Life Tech Deal

NEW YORK ( TheDeal) -- Thermo Fisher Scientific Inc. ( TMO) was gaining in New York as the bio-tech services provider said it would acquire Life Technologies Corp ( LIFE) for $13.6 billion in cash and debt.

Shares of Thermo Fisher were rising 3.5% to $82.38 as investors applauded a deal to create a dominant manufacturer of products used in the medical research and specialty diagnostics market. Life Technologies was surging 7.7% to $73.24.

Terms of the transaction call for Waltham, Mass.-based Thermo Fisher to pay $76 in cash per share for Life, a premium of about 12% over the target's Friday close. The deal values Life's equity at $11.4 billion, with Thermo Fisher also assuming about $2.2 billion in net debt.

Carlsbad, Calif.-based Life Technologies is a maker of testing equipment used in DNA analysis and blueprinting, generating $3.8 billion in sales in 2012. Thermo said that the acquisition would create a market leader with the resources needed to boost R&D.

"The acquisition of Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets," Thermo Fisher CEO Marc N. Casper said in a statement. "Our customers in research and applied markets will now be able to achieve even higher levels of innovation and productivity by working with the combined company." Life in January said it was reviewing options after press reports surfaced saying that several bidders, including private equity firms, had expressed an interest. Shares of the company traded at about $50 apiece at the time.

The Deal reported last week that a consortium including private equity firms Blackstone Group LP, Kohlberg Kravis Roberts & Co. LP and Carlyle Group have made a joint offer valued at between $63 and $65 per share, and chemicals firm Sigma-Aldrich Corp. was also believed to have an interest in Life.

Life chairman and CEO Gregory T. Lucier said the deal "brings together two companies intent on accelerating innovation" while delivering "immediate and significant cash value to our stockholders."

Post deal, Life president and COO Mark P. Stevenson is expected to have "a significant" leadership role in the combination, and Thermo Fisher also said it intends to elect one of Life's directors to its board.

Life was advised by Michael Cohen, David Levin, James Stynes and Alberto Realuyo of Deutsche Bank Securities Inc., Jeff Raich and Ko Kobayashi of Moelis & Co., and attorneys with Cravath, Swaine and Moore LLP.